Political Alignment and Bureaucratic Pay

62 Pages Posted: 23 Oct 2019

See all articles by Jon H. Fiva

Jon H. Fiva

Norwegian School of Management (BI) - Department of Economics

Benny Geys

BI Norwegian Business School; Vrije Universiteit Brussel (VUB) - Applied Economics Department

Tom-Reiel Heggedal

BI Norwegian Business School

Rune Sørensen

BI Norwegian Business School

Date Written: 2019

Abstract

We study the private gains to bureaucrats from their political alignment with elected politicians. Whereas existing studies generally rely on proxies for politician-bureaucrat political alignment, a rare feature of our data allows measuring it directly since 27% of bureaucrats ran for political office. We focus explicitly on individuals at the very top of the administrative hierarchy, and are able to separate the intensive margin (i.e. wage increases) from any additional effects at the extensive margin (i.e. new appointments). Using close elections for inference, we find that politician-bureaucrat alignment significantly increases top bureaucrats' wage even in the Norwegian civil service system. Our results go against predictions from models with policy-motivated bureaucrats, but are consistent with politically aligned principal-agent matches being more productive.

Keywords: bureaucracy, civil service, remuneration, principal-agent, ally principle

JEL Classification: D730, H700, J410

Suggested Citation

Fiva, Jon H. and Geys, Benny and Heggedal, Tom-Reiel and Sørensen, Rune, Political Alignment and Bureaucratic Pay (2019). CESifo Working Paper No. 7895, Available at SSRN: https://ssrn.com/abstract=3474201

Jon H. Fiva (Contact Author)

Norwegian School of Management (BI) - Department of Economics ( email )

Oslo
Norway

Benny Geys

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Vrije Universiteit Brussel (VUB) - Applied Economics Department ( email )

Pleinlaan 2
1040 Etterbeek
Brussel, CA 1040
Belgium

Tom-Reiel Heggedal

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Rune Sørensen

BI Norwegian Business School

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